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Fed. Judge Says FTC Can Sue over Poor Data Security

By Sue Reisinger
May 02, 2014

In a case being closely watched by general counsel, a federal judge ruled last month that the Federal Trade Commission (FTC) has the authority to take legal action against companies that have faulty security practices for consumer data.

“The FTC can now speak with an authoritative tone on what amounts to reasonable data-security practices. Inside and outside counsel will have to listen,” attorney Michael Cowie told e-Commerce Law & Strategy's ALM sibling Corporate Counsel. Cowie, a partner at Dechert in Washington, DC, is a former assistant director and senior litigation counsel at the FTC.

The FTC has gone after companies for the last 10 years for bad data-security protection when consumer information was put at risk, but no one challenged the agency until now.

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